ISP–based private networks can offer direct cost savings over traditional WAN architectures as well as other indirect cost savings. The increased flexibility and scalability of ISP–based private networks can often reduce equipment costs while minimizing network management and technical-training resources.

The most significant benefit of an ISP–based private network is its direct cost savings over traditional WANs. A traditional WAN is composed of distance-sensitive leased-line circuits, which can be subject to interstate and international tariffs and taxes. In comparison, an ISP–based private network only requires shorter leased-line circuits from each office to the ISP's closest PoP. ISPs can also offer flexibility in line speeds; corporations can usually purchase access in fractional tier-1 (T1) increments rather than in an entire T1 circuit from a telco or local exchange carrier (LEC).

Outsourcing network management to an ISP can also indirectly reduce operating costs and resources. In-house technical resources are no longer needed to install, configure, and manage network equipment. A corporation will not need to support dial-up plain old telephone service (POTS) lines or integrated services digital network (ISDN) and leased-line circuits. The information technology (IT) department can concentrate resources on data and server equipment rather than on low-level network equipment.

Several different ways to implement an ISP–based private network can be used. One common implementation transmits corporate traffic over the public Internet but uses encryption to protect the data from unauthorized access. Frame-relay technology also enables the creation of logically isolated circuits or PVCs that provide a private network in which data does not need to be encrypted because it travels only along these logically private circuits.